How does corporate health insurance work?


Working principles of corporate health insurance

Offering private healthcare benefits to your employees is a great way to attract and retain talent. It’s also beneficial for the day-to-day running of your business - after all, a healthy workplace is a happy workplace.

In this article, we’re going to guide you through everything you need to know about corporate health insurance, from finding the right plan to calculating the cost of your group premium.

What is corporate health insurance?

Corporate health insurance is an employee perk typically offered to both full-time and part-time members of a business or team. The company pays for the insurance coverage (for group insurance rather than an individual policy) and in the event where a covered employee falls sick, they can claim any necessary treatment on their insurance. The employee will typically pay a small excess, and the insurance company will cover the rest (provided that the condition or illness is covered by the insurance plan.)

Once typically a unique feature of the US workplace, corporate health insurance is now becoming more commonplace in the UK; as the NHS wait list reaches almost 7 million, more people are increasingly opting for private healthcare.

Not only is corporate health insurance great for your employees, it’s also great for your business: when your employees have access to a higher standard of treatment and shorter waiting times, they’ll spend less time off sick, minimising unforeseen absences and lost productivity.

How much does corporate health insurance cost?

It’s difficult to determine how much a corporate healthcare policy will cost without the specifics of your business. However, the cost of your plan will be based on a number of factors:


When applying for individual health insurance, age is typically the most determinative factor when calculating your overall financial risk. For example, over 60 health insurance will typically incur a higher premium than insurance for someone in their 20s or 30s.

When applying for group coverage, the insurance provider will usually use the average age of all your employees combined to determine an overall cost. If you have a team made up of diverse ages, this can be beneficial when it comes to costs. If your team is older, you may end up paying more.

Work environment

The cost of your corporate health insurance will also depend on the type of work environment your employees are in. If your employees are working a dangerous, physically demanding job with lots of potential for injury or long-term conditions (such as physical labour, outdoor construction, working at height etc) you may end up paying a higher premium.


The cost of private healthcare varies depending where you are in the UK, and insurance costs will fluctuate to reflect this. Businesses in London can expect to pay slightly higher premiums than businesses in other areas around the UK, as prices for care and treatment in London cost more than the UK average.


When claiming treatment on their employee health insurance, your staff members will typically have to pay a small excess fee. The cost of their excess fee will directly impact the cost of the premium: the higher the excess, the lower you’ll pay as a premium (and vice versa). In addition, the larger your business, the smaller the excess fee will be for employees, as the cost is spread further.

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Which employees are eligible for corporate health insurance?

Generally, it’s a good idea to cover all your employees if you’re going to be offering a corporate healthcare policy; this will prevent any accusations of unfair discrimination or special treatment in the workplace.

What does corporate insurance cover?

What your plan covers will depend on how much you’re willing to pay on premiums. If you’re a small business, you might find it more affordable to opt for a basic plan: basic plans will cover most essential non-emergency treatment and in-patient care. Some insurance providers actually offer specific health insurance policies for businesses with less than 250 people, with lower premiums and more affordable coverage.

If your company has the means to do so, you can offer more thorough coverage with a fully comprehensive plan: this will typically include inpatient and outpatient care, consultations, surgery, scans, as well as specialist care for both physical and mental ailments. Some plans will also offer dental care, flexible GP appointments, virtual consultations, and more.

It’s simple: corporate health insurance will only cost what you’re willing to pay. Basic plans will be a lot cheaper but more limited in what they offer, while extensive coverage will cost you more but give your employees more comprehensive healthcare coverage.

What does corporate insurance not cover?

Just like an individual health insurance plan, certain conditions and treatments won’t be covered by a corporate insurance policy. These exclusions can vary depending on your provider, but will tend to include the following:

  • Emergency care
  • Fertility treatment
  • HIV/AIDS treatment
  • Treatment for chronic illnesses
  • Gender reassignment surgery
  • Cosmetic surgery
  • Pre-existing conditions (depending on underwriting type)

Benefits of offering corporate health insurance

So, why offer corporate health coverage for your employees? Not only does it benefit your business, but you might also find that it boosts office productivity and morale in the office. Here are just a few reasons why offering private healthcare perks can improve your working environment:

Fewer absences

Ongoing illnesses account for a large number of employee absences, and this is often fuelled by inadequate access to medical care, as well as long waiting times for specialist treatment. If you want to cut back on employee absences and lost productivity, it can be a good idea to include an attractive healthcare policy as part of your remuneration package.

Boosted morale

There’s nothing worse than being forced to wait for medical treatment when you’re in constant pain or discomfort. Not only is working while sick known to increase your chances of future health problems down the line, but being unwell impacts your productivity while at work. If your employees have access to faster appointment times and treatment, the time lost to illness is reduced, and your employees are happier, more motivated, and enthusiastic to carry out their work.

Employee retention

With the rise of “quiet quitting” and the post-COVID “great resignation”, it might seem harder than ever to hold onto talented employees. The COVID pandemic reshaped how many people view their relationship to work, and since 2021, workers are continuing to resign in record numbers. One way to hold onto great employees is by offering an attractive benefits package, with comprehensive private healthcare as one of its perks.

While employees are at work to earn money and make a living, they do also want to feel valued and cared for in the workplace. By offering a healthcare plan, you’re demonstrating that your employees’ health and wellbeing is as important as their productivity and skills.

Bottom Line

While small businesses are not legally obliged to offer private medical insurance to their employees, doing so can be a great way to boost office morale, attract top talent, and reduce time spent off work due to sickness or illness. Having a generous perks package can also help to protect your business against current economic trends, where workers don’t feel connected to their jobs or decide to flee the workforce altogether. By showing your staff that their emotional, physical, and mental wellbeing is important, you’ll do your bit in helping reshape and reform the modern workplace. To ensure you receive the very best business-specific health insurance advice, your adviser will come from our sister company - Towergate Health & Protection.


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